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Rogoff's an economics prof, and I'm just a commenter, but it seems to me the fallacy is presuming monetary policy can do everything, while "most economists are skeptical that the Fed’s unconventional policy tools are nearly so effective."
The point he's missing is that our current economic malaise is related to a deficiency of market competition (banks and other companies too large, and dominate their markets,) underemployment (a CFO working 3 part-time, minimum wage jobs is not "fully employed",) low demand (related to underemployment) and inequality/tax policies favoring passive economic activity instead of consumption.

The obvious answer is not fiddling with esoteric monetary tools, but a robustly progressive tax structure (promotes consumption and increased demand) fiscal policy aiming at full employment and productive public investment, and a corporate tax that punishes excess size and rewards new companies and competition.

FDR and Keynes had it mostly right. The more we funnel cash to the very wealthy and encourage them to pile it under their mattresses and build walls around their compounds, the more the economy falters. A vigorous middle class is good for everybody.

The fundamental questions of economics are who prospers and how? Historically, the answers are the thrifty by compound interest. Mr Rogoff it seems does not like thrift and does not want to reward it. For him negative interest rates can boost growth and activity, even though they effectively destroy wealth.
Or maybe he's found a fancy new way to do helicopter money. You go into the bank for your loan. "Yes sir, here's your money. Over ten years, 2.5% negative interest per year - means that you have to repay just 75% of the loan. You see our central bank is giving us the difference with our normal costs out of all the new money they are creating."
Could even work politically if the central bank also helicopters some decent extra interest for savers and pension funds.

The obvious problem with the current low interest rates is that they hit nearly everybody - workers, borrowers, middle income savers/retirees and pension funds. Mr Rogoff does not seem to like any of them. Low interest rates reduce the income of current workers, because absent compound interest growth, you have to save more and more of your income for your old age, which hits consumer demand. Borrowers these days have put down 100% security plus insurance plus the risk of rate increases - how are they helped anyway if low interest rates cause rampant asset price inflation.

If Mr Rogoff really wants to boost economic activity, he should argue good interest rates for savers. The Japan example shows that zero interest rates do not create growth - far from it. The British in the 1950's had a very long period of expansion. The BoE prime interest rates were, from 1953 on, nearly always over 5%. When the history of our own period is written, people will ask how our economic experts could have spent so long, blind to the consequences of their low interest rate policies.

In any case, Mr Rogoff should remember that the thrifty are as well the toughest voters - and will not put up with zero interest rates much longer.

Color me sceptical. Rogoff is searching for a way to use a tool -- interest rate policy -- that he admits has already been over-used. He would be better off focusing more directly on income flows, and on opening central bank channels for lending against income. Central banks need to find ways of getting funds to the real economy without pumping asset prices. But interest rate policy can't help with that, no matter what further capital market restrictions central banks attempt to impose. Rogoff should know that.

The real economy works by millions of households and businesses pursuing their consumption and investment decisions, with the results aggregated up to equal the whole of GDP. A recession will both increase government debt and lower interest rates as the demand for risk-free assets rises. Eventually this process is reversed as the desire to consume, invest and form businesses accelerates. Professor Rogoff's analysis must be predicated on heavily quantitative models and theory that bear little resemblance to how firms and households respond in the real world. Why would negative interest rates sans paper money "stimulate" the economy? Bank deposits would be accompanied by higher fees to cover the negative interest rates, presumably with that money going to into the Fed's coffers. The uncertainty created vastly exceeds the non-existent power of forward guidance, which is itself a source of uncertainty. The end result is an economy that resembles that of Japan.

The least that the Fed should do is not get trapped in the paradigm that the current is not too good against the future; for all we now the future could be far worse than the present. We have been using discount rates at some whims and fancy, the real discount rate should be such that the present value of future cash flows do not make us rich now at the cost of our children.

A series of what would have at one time been considered outlandish ideas, such as a war on cash, forgiving debt through a debt jubilee, giving everyone a guaranteed income, and even injecting money into the economic system by dropping it from a helicopter have all found their way into conversations about ways to jump start the economy.

These are all over the top solutions offered to resolve the problem of slow economic growth in a global economy mired in debt. These efforts should be considered not real solutions but desperate attempts to render the laws of economics moot and move us further into the false state of modern voodoo economics. The article below delves into how these help to perpetuate the false illusion all is well.

Recently China has been on a tear to add liquidity to its flagging financial system. What it is failing to do is reform. A combination of corruption, to much debt, and policies that misallocates capital will come back to haunt them.

Expect the debate to continue as to whether China has turned the corner, however, one thing is clear and that is money flowing out of the country continues to distort markets across the world. More on this subject in the article below.

The current system is not working as evidenced by the rise of Trump and Brexit. Doing more of the same when it is not working and expecting the same result is stupidity. Saying we should do nothing and let the chips fall where they may is masochism. I don't think any ideas are not worth considering. I do though think most ideas are difficult to implement and get the result you hope, unless everybody pulls in the same direction.

Policy works, if done correctly, consider China, which has increased GDP per capita over 4000% in 35 years.

I guess the Fed is willing to go down with the ship trying to control things it ultimately can't control, like trying to use ones fingernails to dig out of a cinder block cell. It considers individual free actions which counter its actions as something to be prevented, in other words democracy must be revoked to implement policy. But tyranny can be upset by popular reaction, which is typically not factored into economic theory.

So you think the central banks have some credibility. A dubious thought considering most of the past they have been in prescriptive mode and now the shit has hit the fan after a protracted period they have no idea what to do. Bombarding them with ideas that has a tail is natural but what we need is an idea with a poison chalice. It is times like this that exposes the short comings of the systems we have put ourselves in and the falsehoods some call credibility...

Don't blame the central banks, or at least mostly not. Mostly, they did what they could within the established rules by dropping interest rates to zero and even a bit below. The problem is that they just don't have good options when interest rates hit zero. That's why we need fiscal policy too.

I worry when I see Mr. Rogoff worried. Fortunately in his photograph for the occasion he does not seem to be very concerned. Thanks God.
We are indeed at "the end of the tether" --Conrad dixit-- as far as monetary self-deception goes.
Perhaps we have to look outside the current board. How about the power system?

I would argue that fiscal policy is the answer, but that it needs to be taken out of the hands of politicians and controlled by an independent body, in the same way as monetary policy. Give such an independent agency control of some key tax rate, like the rate of a value-added tax. It could then control the economy through an instrument that would be both fast-acting, and much less distortionary than controlling interest rates.

I am sure if you pay people to take money it would work in providing stimulus. But it is like giving ever increasing shot of adrenaline to a patient dying of bleeding - you might keep them alive for a short while longer but then what?

You cannot fix microeconomic problems with macro economic policy. The reason interest rates are not working is that the money is being lent by banks to shareholders and landlords, and not to entrepreneurs. To fix this problem tackle the real problem and start taxing passive assets until capital moves naturally to active assets. Of course, a professor at Harvard would have to have to be quite bold to suggest something like that.

Governments and central bankers have many tools that they can utilise to generate real growth and real paid jobs but do not have the desire , the will or the intention to doing anything constructive. They are just playing for time and playing politics and playing with people's lives.

Ken and his pals should "look hard" in the mirror and recognize that they are Lucille Ball et al. on the cognitive candy line of their own design. But those prior incomes were so delicious, and the credit toque so capacious ... See https://www.youtube.com/watch?v=HnbNcQlzV-4